TORONTO, Nov. 9 /PRNewswire-FirstCall/ - Spectral Diagnostics Inc. today announced second quarter financial results that reflected continuing improvements in its operations. The loss for the three months ended September 30, 2006 of $0.4 million (2 cents per share) was $1.1 million (6 cents per share) lower than for the same period last year. For the six months ended September 30, 2006, the Company recorded net income of $4.3 million (19 cents per share), compared to a loss of 17 cents per share a year earlier. Year-to-date results include a $5.4 million gain on settlement of convertible notes payable pursuant to an agreement with former security holders of IDx Inc.
“We are very pleased with the early acceptance of Spectral’s new EAA(TM) instrumentation, our developing distribution relationships and our ability to maintain a low operating cost base”, stated Dr. Paul Walker, President & CEO of Spectral. “So far, we have placed 20 revenue generating EAA(TM) instruments worldwide, the majority of which were shipped in the second quarter”, added Dr. Walker.
“The instrumentation placement level in the second quarter is significant because these instruments will generate improving revenues in subsequent quarters as utilization of the EAA(TM) assay increases”, stated Mr. Anthony Businskas, Executive Vice President & CFO of Spectral. “Our operating cash flows improved quarter over quarter and this trend is expected to continue”, added Mr. Businskas.
Spectral is a developer of innovative technologies for rapid diagnostics. Spectral provides accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products include rapid diagnostics for sepsis (EAA(TM)) and West Nile Virus as well as a range of other biological reagents. Spectral’s common shares are listed on The Toronto Stock Exchange: SDI.
Information in this news release that is not current or historically factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, the future outlook of Spectral and anticipated events or results are assumptions based on beliefs of Spectral’s senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.
Spectral Diagnostics Inc. Consolidated Financial Statements - unaudited September 30, 2006 and 2005 (in thousands of Canadian dollars) Spectral Diagnostics Inc. Consolidated Balance Sheets - unaudited As at September 30, 2006 and March 31, 2006 ------------------------------------------------------------------------- (in thousands of Canadian dollars) September 30 March 31 2006 2006 $ $ Assets Current assets Cash and cash equivalents 6,036 4,003 Short-term investments 3,350 Accounts receivable 812 877 Inventories 126 43 Prepaid expenses 188 250 -------------------------- 7,162 8,523 Capital assets 245 170 Purchased technology and trademarks 2,117 2,353 Deferred financing costs 158 512 -------------------------- 9,682 11,558 -------------------------- -------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 639 1,224 -------------------------- 639 1,224 Convertible notes payable 1,877 9,596 -------------------------- 2,516 10,820 -------------------------- Shareholders’ Equity Common shares 2,609 99,446 Other equity 4,988 4,963 Deficit (431) (103,671) -------------------------- 7,166 738 -------------------------- 9,682 11,558 -------------------------- -------------------------- Spectral Diagnostics Inc. Consolidated Statements of Operations and Deficit - unaudited For the six months ended September 30, 2006 and 2005 ------------------------------------------------------------------------- (in thousands of Canadian dollars, except share and per share data) 3 Months Ended 6 Months Ended September 30 September 30 2006 2005 2006 2005 $ $ $ $ Sales 675 2,265 1,422 4,558 Cost of sales 235 1,059 485 2,140 ------------------------ ------------------------ Gross margin 440 1,206 937 2,418 ------------------------ ------------------------ Operating expenses Selling, general and administrative 674 1,976 1,411 3,699 Amortization 207 342 407 700 Foreign exchange loss 5 119 46 79 Stock-based compensation 14 35 25 69 Research and product development 53 496 97 914 Government assistance (51) (807) (51) (932) ------------------------ ------------------------ 902 2,161 1,935 4,529 ------------------------ ------------------------ Loss from operations (462) (955) (998) (2,111) Interest expense on convertible notes payable (37) (540) (242) (1,080) Interest income (expense) 68 (46) 116 (44) Gain on settlement of convertible notes payable 5,444 - ------------------------ ------------------------ Net income (loss) for the period (431) (1,541) 4,320 (3,235) Deficit - Beginning of period (103,671) (100,710) (103,671) (99,016) Restatement of capital 98,920 98,920 Deficit - End of period (431) (102,251) (431) (102,251) ------------------------ ------------------------ ------------------------ ------------------------ Basic and diluted net income (loss) per common share (0.02) (0.08) 0.19 (0.17) ------------------------ ------------------------ ------------------------ ------------------------ Weighted average number of common shares outstanding 24,111,424 19,860,166 22,252,951 19,860,166 ------------------------ ------------------------ ------------------------ ------------------------ Spectral Diagnostics Inc. Consolidated Statements of Cash Flows - unaudited For the six months ended September 30, 2006 and 2005 ------------------------------------------------------------------------- (in thousands of Canadian dollars) 3 Months Ended 6 Months Ended September 30 September 30 2006 2005 2006 2005 $ $ $ $ Cash provided by (used in) Operating activities Net income (loss) for the period (431) (1,541) 4,320 (3,235) Items not affecting cash Amortization 207 342 407 700 Stock-based compensation expense 14 35 25 69 Accrued interest on convertible notes payable 37 540 242 1,080 Gain on settlement of convertible notes payable - - (5,444) - Changes in non-cash working capital (170) (11) (750) (638) ------------------------ ------------------------ (343) (635) (1,200) (2,024) ------------------------ ------------------------ Financing activities Bank indebtedness - (220) - (254) Restricted cash - 657 - 1,366 ------------------------ ------------------------ - 437 - 1,112 ------------------------ ------------------------ Investing activities Purchase of capital assets (4) (107) (117) (176) Proceeds on sale of short-term investments - - 3,350 - ------------------------ ------------------------ (4) (107) 3,233 (176) ------------------------ ------------------------ Increase (decrease) in cash and cash equivalents during the period (347) (305) 2,033 (1,088) ------------------------ ------------------------ Cash and cash equivalents - Beginning of period 6,383 911 4,003 1,694 ------------------------ ------------------------ Cash and cash equivalents - End of period 6,036 606 6,036 606 ------------------------ ------------------------ ------------------------ ------------------------ Non-cash financing activities Retirement of existing convertible notes payable (9,801) Issuance of new convertible note payable 1,840 Issuance of common shares 2,083 Decrease in deferred financing costs on re-issue of warrants 280
Spectral Diagnostics Inc.
CONTACT: At: Spectral Diagnostics Inc., Anthony Businskas, Executive VP &CFO, (416) 626-3233 ext. 2200
